The Commercial Taxes Department, Government of Karnataka, has taken a decisive stand against a network of counterfeit GST bill operators in the southern zone of Bengaluru. This illicit syndicate facilitated companies within the service sector, particularly those dealing with manpower and labor supplies, to illicitly claim fake Input Tax Credit (ITC) and artificially boost their reported turnover.
In an official announcement, it is highlighted that this marks a groundbreaking operation, as it is the first instance of exposing a false invoicing scheme within the service industry.
Investigations by the Enforcement Wing brought to light that nearly 30 fictitious entities were established, utilizing the identities of family members, acquaintances, and associates. While scrutinizing the transactions, it was revealed that a staggering ₹525 crore was involved in this fraudulent activity. The enforcement team estimates a substantial revenue loss of approximately ₹90 crore suffered by the government due to this deception.
The Enforcement Wing swiftly took action and apprehended two individuals believed to be the masterminds behind this operation – Guru Prakash H.M. and Manjunathiah H.M. The operation is anticipated to lead to more arrests, as stated in the official release.
The Department of Commercial Taxes of Karnataka is adopting a robust approach in tackling the menace of fabricated invoicing and tax evasion. It is underscored that participation in such deceitful practices can result in severe consequences, including arrest, legal prosecution, and imprisonment. Additionally, fines, penalties, confiscation of assets, and the provisional seizure of properties and bank accounts may be imposed, reinforcing the government’s determination to root out such illicit activities.